Gold Won’t Rally Unless This Happens - CPM Group
Apr 20, 2018
Unless there is a much more negative economic view from investors’ consensus, then gold is unlikely to break out of its current trading range, said Jeff Christian, managing partner at CPM Group.
“It’s going to take higher interest rates to move gold higher,” Christian told Kitco News on the sidelines of the IPMI Precious Metals Mobility Symposium.
Christian noted that a lot of times rising interest rates are positively correlated to gold, since higher rates means bad news for the stock markets, housing markets, and overall economic conditions, all things that are conducive to an uptick in safe haven assets like gold.
Gold Wants To Go Higher, But U.S. Dollar Hijacks Metal's Rise
(Kitco News) - The market is paying attention to the rising U.S. dollar, which poses a big risk to gold prices going into next week, according to analysts.
Gold prices ended the week on a lower note, giving up all of Wednesday’s impressive gains. June Comex gold futures were trading at $1,338.10, down 0.79% on the day, as markets are getting ready to close on Friday. Meanwhile, the U.S. dollar index was last at 90.32, up 0.42% on the day.
“The down-move in the yellow metal came as the U.S. dollar index pushed to its daily high. Some profit-taking from the shorter-term futures traders is also featured heading into the weekend,” said Kitco’s senior technical analyst Jim Wyckoff.
Earlier this week, gold hit a high of $1,356, supported by a rally in crude oil and geopolitical risks, which helped the precious metal to stay above the $1,330 level despite a more risk-on sentiment in the marketplace, Wyckoff added.
But, with the next week on the horizon, analysts are telling traders to pay attention to the U.S. dollar.
“The U.S. dollar is a big risk for gold, we’ve seen a bit of an uptick this morning, as the 2-year yield and the 10-year yield curves steepened,” head of global strategy at TD Securities Bart Melek told Kitco News on Friday.
Overall, Melek said he is “little positive” on gold at these levels, saying that the yellow metal is likely to remain range-bound next week.
“The market is looking at the American data and it looks decent. People in the market are talking about potentially four Federal Reserve rate hikes and another two or three the following year, which is driving the 2-year yield,” Melek pointed out.
Some analysts are even more cautious when it comes to prices next week, expressing a bearish stance.
Todd 'Bubba' Horwitz, chief market strategist at BubbaTrading.com, said he will remain bearish until gold breaks above the $1,355 an ounce level.
“Sustainability” is key here, stated commodity strategist at RBC Capital Markets Christopher Louney. If gold can hold near the top of its trading range of above $1,350 an ounce for at least a week, then a bigger move seems more likely, Louney explained.
“We need to see a sustained level above that $1,340-$1,350 for at least a week — that would be enough to break on the upside,” he said.
For now, the RBC Capital Markets strategist is not changing his bearish outlook. “We’ve been calling for some consolidation in Q2. A lot of the long-term macro headwinds are still in place, but are softer than a year ago. Have to keep an eye on the U.S. dollar and the Fed,” he noted.
Gold will need a big geopolitical catalyst to break out of the $1,300-$1,360 trading range, Louney added, while highlighting some significant downside risks, including economic growth and equity market gains.
Geopolitics Have The Power To Move Gold
Geopolitical risks will also remain one of the primary drivers next week, according to Capital Economics analyst Simona Gambarini.
“The main thing to monitor is whatever happens to geopolitical risks, it is what is going to drive prices over the next few weeks,” Gambarini said.
This past week was dominated by a very restrained fallout from Western strikes on Syria, sanctions against Russia, and escalating trade war fears between the U.S. and China.
Gambarini added that any new U.S.-Russia developments could move gold prices.
“Markets will continue to monitor closely developments in relations between the U.S. and Russia. Any signs of deterioration are likely to boost demand for gold and other safe-haven assets,” she said. “That said, tensions appear to have already come off the boil as President Trump has backtracked on his decision to impose additional sanctions on Russia and pledged to maintain a ‘good relationship’ with the country.”
Other analysts are waiting for a completely new catalyst to drive prices higher or lower.
“While bulls remain inspired by geopolitics, lingering trade war fears and U.S political risk, bears have found support in the form of rising U.S rate hike expectations,” said research analyst at FXTM Lukman Otunuga. “Gold is likely to remain a battleground for bulls and bears until a fresh directional catalyst is brought into the picture.”
From a technical perspective Otunuga sees prices challenging $1,360 only if gold maintains the level of at least $1,340, adding that any move below $1,340 could lead to a decline towards $1,324.
Data To Watch
There will be a number of important macroeconomic datasets released next week.
Some of the key things to watch include U.S. preliminary GDP Q1 estimates, ECB interest rate decision, U.S. durable goods orders, Markit composite PMI, existing U.S. home sales and new U.S. home sales.
“We expect GDP data for the US (Friday) to show that economic growth slowed in the first quarter, albeit to a still reasonably healthy 2.3% annualized,” analysts at Capital Economics wrote in a note published on Friday.
Is This The End Of Palladium? - Mitsubishi Corp.
Apr 20, 2018
Jonathan Butler Mitsubishi Corporation
Over the next five to seven years, the combustion engine will still be the dominant form of powertrain, meaning cars will still need palladium as emissions controls catalysts, said Jonathan Butler, precious metals strategist at Mitsubishi Corporation.
“It’s only in the very longer term that we start to see battery electric vehicles come in and start to displace some of that traditional platinum and palladium demand in emissions controls, because of course, battery electric vehicles don’t need catalysts,” Butler told Kitco News on the sidelines of the IPMI Precious Metals Mobility Symposium.
Butler noted that there may also be a chance that hydrogen fuel cell vehicles become the dominant form of powertrain. Fuel cells also require the use of platinum-group metals, including palladium.
Gold extends slide to $1,334 as USD remains strong
APRIL 20, 2018 11:23 AM EST
Gold accelerated to the downside, down $20 from last week highs.
Stronger US Dollar continues to be the main driver.
Gold dropped further and bottomed at $1,334.95/oz, the lowest level since last Friday. It was hovering near the lows still under pressure. From Wednesday’s high it fell $20 on the back of a rally of the greenback.
The US Dollar rose further across the board during the US session. US Dollar Index Futures rose above the 90.00 area boosted by higher US bond yields. The 10-year yield was at 2.93% at the highest since March.
Levels to watch
The slide pushed the price near last Friday lows located at $1,332; below, attention would turn to an uptrend line from December that stands at $1,330. A break lower could clear the way to more losses with a potential target at $1,320.
To the upside, immediate resistance is now seen at $1,341. The key level to the upside continues to be $1,350. During the week gold traded on top but failed to hold and retreat. The yellow metal needs to break and consolidate significantly above $1,350 in order to clear the way to more gains. The mentioned area has been capping the upside since December.
Gold Should Have Rallied Stronger - Mitsubishi Corp.
Apr 19, 2018
Jonathan Butler Mitsubishi Corporation
One analyst was surprised that spot gold didn’t push higher above its $1,365 an ounce peak a few weeks ago, given heightened geopolitical risks and the prospect of a trade war still looming on investors’ minds.
Gold rallied in early April, testing $1,360 an ounce, which is a key resistance level for many analysts, but lost momentum shortly after.
“We were surprised that gold didn’t rally a bit stronger, given all the geopolitical uncertainty surrounding Syria, Russia, on top of all the concerns about trade wars with China,” Jonathan Butler, precious metals strategist at Mitsubishi Corporation, told Kitco News on the sidelines of the IPMI Precious Metals Mobility Symposium. “In all of these times, gold can act as a safe haven.”
Butler added that in order for gold to push higher, there needs to be a more serious escalation of conflict beyond merely a “war of words.”
“We’re now entering a time where gold demand is getting a little stronger, especially from key Asian markets, so the timing of that together with these geopolitical concerns might bring some further upside from here, we believe,” he said.
Gold trying to get above $1,355 as uncertainties on Russian sanctions linger on
APRIL 19, 2018 10:13 AM EST
The uncertainties about Russian sanctions keep the yellow metal in the $1,350 region.
Bulls have a hard time to break above $1,355 in what might be a crowded trade.
Gold is trading at around $1,348 a troy ounce, virtually unchanged on Thursday as the market is slowly grinding higher but failing to materialize a breakout above 1,355 resistance and 2018 high at 1, 365.70.
Keeping gold afloat are the uncertainties related to the Russian sanctions by the US. According to the latest news, sanctions would come when needed. "We'll do sanctions as soon as they very much deserve it. There's been nobody tougher on Russia than President Donald Trump." said the US President.
Earlier in the week on Sunday, the UN Ambassador, Nikki Haley made a statement confirming that sanctions on Russia were coming imminently. However, the US President pointed out that sanctions are indeed ready, but they will only be implemented if necessary.
The threat of the attack on Syria last week made gold jump above yearly highs to 1,365.70. However after the airstrike was done and dusted and more than 100 missiles were fired on Syrian chemical weapons facilities, gold went down and US stock went on a relief rally with investors focusing on corporate earnings. The military intervention in Syria was seen as an isolated event as opposed to the start of a new war.
Meanwhile, silver, gold little brother, is trading at 11-week highs against the US dollar at $17.25 a troy ounce.
Gold 4-hour chart
Gold is evolving in a bull channel in a triangle pattern in what might be a crowded trade on the bull side. Repeated failures above 1,355 can lead to bull capitulation and a test down to the 1,330 and 1,320 psychological levels. On the other hand, if the bulls win the tug of war above 1,355 then a retest of the 2018 high at 1,365.70 is to be expected
Electric Cars: Precious Metals' New Best Friend
Apr 18, 2018
Johann Wiebe Lead Metals Analyst, Thomson Reuters GFMS
Precious metals, including silver and gold, are clear winners in the electrification of vehicles, said Johann Wiebe, lead metals analyst at Thomson Reuters.
“We see a strong demand there [for silver] from the automotive sector using electrical applications in the various arrays in cars,” Wiebe told Kitco News on the sidelines of the IPMI Precious Metals Mobility Symposium.
Wiebe noted that new applications in vehicles, such as autonomous driving, require more silver in electronics components. Furthermore, the electrification of powertrains will require more silver and gold in electrical components.
“Directly, silver is not going to be so much affected by the electric powertrain push, but indirectly, for sure,” he said.
Gold bulls aim to retest the 1,366.00 region
APRIL 18, 2018 2:23 PM EST
Base metals keep rallying on easing geopolitical concerns.
Gold supported by Fed's dot plot, dollar's weakness.
Gold prices retake the upside and stand at their highest for the week, with spot trading at around $1,350.00 a troy ounce after hitting a daily high of 1,355.58. Base metals are up for the week, despite the positive tone in equities, with silver so far leading the way, up over 2% from Friday's close. The bright metal trimmed an early decline, amid receding dollar's demand, and gained on easing geopolitical concerns that usually had a limited impact on prices.
Further backing the commodity is the sharp rally in oil prices which stand at fresh 2018 highs following the US EIA weekly report, with showed that US stockpiles of crude decreased by less-than-expected, but also that a large gasoline inventories' draw.
Gold has topped twice this year in the 1,366.00 region, after bottoming at 1,236.43 mid-December, and held above the 1,300.00 threshold these last couple of months. The fact that the Fed hasn't changed its dot-plot to more than three times is yearly, is surely supporting the bright metal, with scope now to retest the mentioned 1,366.00 region. Beyond it, the next key level is July 2017 high of 1,375.11, while beyond it, the path toward 1,400 becomes clearer.
China: Growth holds steady but slowdown expected – Wells Fargo
APRIL 17, 2018 2:43 PM EST
Analysts at Wells Fargo, explained that real GDP growth in China was 6.8% y/y in Q1, the third consecutive print of this magnitude. They noted that a deceleration in investment spending “presages a gradual slowdown in economic growth in the coming quarters.”
“Real GDP growth in China met expectations for Q1-2018, matching the Bloomberg consensus forecast of 6.8 percent year over year. Economic growth in China has been remarkably stable over the past couple of years as policymakers have worked to engineer a “soft landing” as the economy enters a more mature phase of its development”.
“Retail sales growth rebounded strongly in Q1 after hitting a mild soft patch to end Q4-2017. In the press release from the National Bureau of Statistics of China, the agency noted an acceleration in services output in March, suggesting solid momentum heading into Q2. However, investment spending and industrial production both decelerated in March. In part, this reflects a conscious effort by Chinese policymakers to shift the economy towards a more consumption oriented model of growth. Trade also likely contributed to growth in Q1.”
“On balance, today’s report reaffirms our outlook for the Chinese economy. Economic growth remains firm, boosted by the cyclical-upturn in the global economy. However, we believe structural factors will continue to weigh on economic growth over time. Decelerating investment spending and an aging population are the ingredients for slowing potential growth. In addition, Chinese policymakers recognize the possible threat from high leverage in the nonfinancial corporate sector and have taken steps to slow credit growth.”
Fed’s Evens: US economy firing on all cylinders
APRIL 17, 2018 1:53 PM EST
Fed's Evens is crossing the wires and has said that the US economy is firing on all cylinders.
Fed can raise rates gradually without risk of inflation surge, Evans says
Fed funds rate does not need to rise much above neutral setting
Interest rates expected to rise gradually over next couple of years
Evans says U.S. Economy firing on all cylinders
Job market 'solid,' consumer spending fundamentals 'quite strong'
Capital spending has 'forward momentum,' fiscal policy strongly expansionary
Global growth picking up, sees trade uncertainty
U.S. Inflation somewhat below target, expected to improve
Sees little risk of accelerating, markedly higher inflation
About Charles L. Evans
Charles L. Evans is the ninth president and chief executive officer of the Federal Reserve Bank of Chicago. In that capacity, he serves on the Federal Open Market Committee (FOMC), the Federal Reserve System's monetary policy-making body.
Gold trims losses despite USD rebound, $ 1350 back in sight
APRIL 17, 2018 6:23 AM EST
Finds buyers once again near $ 1343 levels, as bulls look back to $ 1350.
Will the bounce sustain amid higher European stocks/ risk-on?
Gold futures on Comex are attempting a minor bounce from two-day lows of $ 1343.40, as the bulls continue to find support just ahead of the hourly 200-MA located near $ 1342.20 levels.
Despite, a risk-on rally seen in the European equities, positive Treasury yields and broad USD rebound, the yellow metal is seen making headway once again towards the psychological levels of $ 1350, as the ongoing geopolitical tensions between the US and Russia over the Syrian strikes continue to underpin the sentiment around the safe-haven gold.
However, further upside appears capped as the investors prefer to hold the US currency heading into a flurry of US macro releases due on the card in the session ahead. Meanwhile, a slew of Fedspeaks could also leave the gold bulls on the back foot, as the Fed officials deliver comments on the Fed’s monetary policy programme.
FXStreet’s Analyst, Omkar Godbole noted: “A move above $1,350 (previous day's high) could yield a re-test of supply around $1,362 (Feb. 16 high), above which a major resistance is seen at $1,365 (April 11 high). On the downside, breach of support at $1,341 (10-day moving average) would allow a drop to $1,333 (April 12 low) and $1,331 (50-day MA).”
Jim Rogers - Before All This Is Over, Gold Is Going Through The Roof
Apr 16, 2018
Legendary investor Jim Rogers said enjoy the market rally while it lasts, issuing a dire warning that “the worst correction of his lifetime,” is coming for stocks.
“Soon something’s going to happen that will make everyone happy again and the market will go up one more time, and that will probably be the last hoorah. Next year will be not a lot of fun,” Rogers said in an interview with Kitco News on Monday.
He added, "It’s been ten years since we have had a bear market, that is very, very unusual so the next bear market is going to be the worst in my lifetime."
When promoted to quantify the correction, Rogers said it would easily be over 50%.
Gold Rally: Only A Matter Of Time - Bill Baruch
Apr 16, 2018
Bill Baruch President, Blue Line Futures
With gold hitting a seven-week high last Wednesday, many investors are hoping to see strong momentum carry over into this week.
But one trader is also warning that while the gold market is ready for a breakout, investors still need to be patient. Bill Baruch, president of Blue Line Futures, said on Monday said that it is only a matter of time before gold breaks its current trading range.
Gold prices are moderately up and trading near their session highs in late-morning dealings Monday. As a sign of the overall technical bullish momentum in the marketplace, traders stepped in at the start of the week and bought early price weakness. June gold was last up $4.00 an ounce at $1,352.00.
Gold up for the day but limited by $1350
APRIL 16, 2018 12:03 PM EST
Gold higher despite risk appetite and US data.
A weaker US dollar supports the yellow metal.
Gold peaked after the beginning of the US session at $1,350.50/oz. It failed to follow through and pulled back. As of writing, was trading at $1,346 up modestly from Friday’s close.
The metal was rising despite the improvement in risk appetite. The air strike in Syria by US, British and French forces was done in a way that minimized the potential for an escalation in tensions with Russia. The impact in global markets at the beginning of the week was limited.
The key driver on Monday appears to be USD weakness. US Dollar Index Futures dropped from 89.45 to 89.03, level located marginally above last week lows. The greenback also pulled back against commodity and emerging market currencies. Better-than-expected US data did not offer support to the US dollar. Retail sales rose in March 0.6% above the gain of 0.4% analysts predicted.
Gold Technical Levels
To chart shows gold moving above an uptrend line with support at $1,320. But the upside continues to be limited by near $1,350. The metal needs a daily close well above $1,350 in order to clear the way to more gains. While below, it is likely to remain limited and expose to corrections.
From the current level, the immediate support might lie at $1,340, followed by $1,332 and the mentioned $1,320 (uptrend line Nov-Apr move). Below the last one, an acceleration to the downside seems likely.
Gold: $ 1350 – a tough nut to crack, focus on US retail sales
APRIL 16, 2018 6:23 AM EST
Will it regain $ 1350 on weaker US retail sales?
Risk-off and weaker DXY will continue to offer support.
Gold futures on Comex are seen treading water below the midpoint of the 1300 levels, as the bulls remain on the back foot ahead of the US retail sales data release.
The yellow metals failed several attempts to regain the 1350 barrier, despite persisting risk off trades, as investors continue to assess the implications of the weekend’s US-led missile strikes on Syria on the broader markets.
However, the downside remains cushioned amid ongoing sell-off in the US dollar versus its main competitors, as worries over a potential US-Russia war over Syria continue to remain USD-negative.
More so, in an evidence of increased confidence in gold, speculators raised their net long positions in COMEX gold contracts by 363 contracts to 138,212 contracts in the week to April 10, the US CFTC) data showed last Friday.
Attention now turns towards the US retail sales data and FOMC member Bostic’s speech for fresh incentives on the USD-sensitive gold. Also, in focus remains the Chinese Q1 GDP figures. Meanwhile, markets appear to have shrugged-off upbeat comments by the Minneapolis Federal Reserve President Neel Kashkari.
The Dukascopy Bank Team noted: “The nearest resistance is the monthly R1 and the senior channel at 1,354.00 and 1,360.00, respectively. In case the pair is driven by strong upside momentum, the yellow metal should not edge above the 2017/2018 high of 1,366.17. By and large, Gold has diminished its trading range in a seven-week ascending channel. This might be an early indication of a breakout south. This bearish movement also corresponds with the sensor channel. In terms of today, Gold should not fall below the 1,330.00 mark.”
Oil, Gold To Gain On Syria Strikes; Russian Retaliation In Focus
Sunday April 15, 2018 17:39
Jan Harvey, Sujata Rao
LONDON (Reuters) - Gold and oil will extend their gains on Monday, albeit modestly, when markets open for the first time since Western powers launched a missile attack on Syria, but equities are unlikely to suffer big losses unless the West strikes again or Russia retaliates.
“The news flow is actually better than what it looked like at one point during last week as the strike was surgical, followed by a pullback. Reports show a lot of care was taken not to hit Russian targets, which is a good sign and the market should take heart from that,” said Salman Ahmed, chief investment strategist at Lombard Odier investment managers in London.
Gold has benefited in recent days as a safe-haven asset amid a U.S.-China trade dispute and the escalating conflict in Syria, which also pushed oil above $70 per barrel due to concerns about a spike in Middle Eastern tensions.
World stocks wobbled last week but still ended with the best weekly gain in over a month, as investors await potentially healthy U.S. company earnings.
Despite heightened geopolitical risks, the impact on so-called safe-haven assets has been short-lived and modest. While the yen rose initially on fears of a Syrian strike, it ended near seven-week lows to the dollar last week.
On Saturday, U.S., French and British missile attacks struck at the heart of Syria’s chemical weapons program in retaliation for a suspected poison gas attack a week ago, although the assault appeared unlikely to halt Syrian President Bashar al-Assad’s progress in the seven-year-old civil war.
The bombing, denounced by Damascus and its allies as an illegal act of aggression, was the biggest intervention by Western countries against Assad and his powerful ally Russia.
But the three countries said the strikes were limited to Syria’s chemical weapons capabilities and not aimed at toppling Assad or intervening in the civil war.
Naeem Aslam, chief market analyst at Think Markets, said gold was poised to gain on Monday but the rally wouldn’t be very steep: “The focus will be on the counter-reaction from Russia.”
Gold, often used as a store of value in times of political and economic uncertainty, could rally towards $1,400 per ounce after two consecutive weeks of gains.
“If we do break above $1,365, that next week we would be very bullish,” said Aslam.
Tokyo will be the first major market to open on Monday and the yen will likely strengthen to the dollar, but not beyond 106.50, said Itsuo Toshima, market analyst at Toshima & Associates adding that he didn’t expect stocks traders to make sharp moves.
“The first attack was within expectations and was already priced in the market ... However, if there is a second round of strikes, that is not in line with expectations. So that should prompt a sharp risk-off move in markets,” he added.
Frank Benzimra, head of global markets for Asia Pacific at Societe Generale Corporate and Investment Banking, said stocks would plunge only in case of new strikes by Western powers.
In case of such an escalation, oil would rally further, the yen would spike and Japan’s domestic defensive stocks would outperform international stocks.
“For the stress on Asia equity markets to be sustainable, we would need to have oil prices spiking to such a level that fundamental concerns, i.e. higher inflation and risks on growth, return to the market,” he said.
Amrita Sen from Energy Aspects said that despite Middle Eastern tensions and looming new U.S. sanctions on Iran, oil has outperformed most expectations this year and may have rallied too far too fast.
“We are likely to get a sell-off this week as the extent of the Syrian strikes have been muted and, in general, calmer nerves prevail in Washington,” she said.
Oil traders had locked in long positions ahead of the weekend, in anticipation of potential strikes, sending both West Texas Intermediate CLc1 and global benchmark Brent LCOc1 crude futures to their highest since 2014.
Reporting by Vidya Ranganathan, Sujata Rao, Jan Harvey and Dmitry Zhdannikov; additional reporting by Jessica Resnick-Ault; Writing by Dmitry Zhdannikov; editing by David Evans and Nick Zieminski
Tensions escalate: Trump hits back at Syria – ANZ
APRIL 15, 2018 4:53 PM EST
Geopolitical tensions escalated over the weekend after president Trump (in conjunction with the UK and France) followed through with his threat to hit back at Syria for its use of chemical weapons.
"While it might be the end of this particular response, Trump has indicated that the US is ready to continue in this fashion should Assad continue to use chemical weapons. Trump also called out Iran and Russia for their support of Assad, stating “the nations of the world can be judged by the friends they keep”.
"Treasury Secretary Steven Mnuchin is expected to announce fresh sanctions on Russia, which are said to be targeted at companies “dealing with equipment related to Assad and chemical weapons use”."
Allies against Syria, possible consequences for Sunday opening
APRIL 14, 2018 7:23 AM EST
Safe-havens set to gap higher at the weekly opening.
High-yielding assets to come under pressure, but EUR and GBP may not see large drops.
Late Friday in the US and well after financial markets closed, news indicated that the US, France, and the UK launched strikes on Syria, in response to the chemical attack to local civilians, allegedly made by President Bashar al-Assad. US President Trump announced the strike on targets "associated with the chemical weapon capabilities of Syrian dictator." Despite not participating in the event, Germany supported the attack as Chancellor Angela Merkel said that the strikes were "necessary and appropriate."
Russian answer was immediate to defend its ally, Syria, not only menacing with an armed response, but President Putin also said that this act will only exacerbate the humanitarian catastrophe in the country.
For the financial world, this means one thing: risk aversion. Investors have been on their toes amid political jitters fueling uncertainty, and this is just another trigger for such negative sentiment that will likely result in gaps across the different trading boards in favor of safe-havens and against high yielding assets.
Strength is particularly expected for the JPY and gold, while equities and European currencies could open lower. Given that this conflict Is focused on an oil-producer county may result in decreasing supply, meaning oil prices should rally through their recent highs. That could put the CAD on the run, but for the Aussie, an oil rally won't be enough, and would rather take clues from equities.
Finally, and with the dollar being the less attractive currency across the board and while the EUR and the GBP may come under pressure, no big fireworks are expected there.
Gold Trades to the Highest Price Since 2016
Gold futures (June 2018 Comex contract) gained $6.70 today and are currently trading at $1,348.60 per ounce. Gold closed higher on four of the five trading days this week, resulting in an $11 gain. This marks the second consecutive week of higher pricing for gold.
However, it is the high achieved this week that is the most significant event. On Wednesday, gold futures traded to an intraday high of $1,369.30. This price point is well above the three former highs that were achieved in September of last year and during the first quarter of this year.
This marks the fourth time since September 2017 that gold prices have broken above $1,350 per ounce. Prior to that, these rallies were unable to sustain a price point of even $1,300.
What makes Wednesday’s high so significant is the fact that you have to go back to August 2016 to find a time in which gold traded at this price level. The highs achieved during the 2016 rally took gold pricing just above $1,375 per ounce.
More importantly, the highs achieved during that rally were the first occurrence of a higher high since the multiyear correction began in the middle of 2011. It is for that reason that that price point is so significant now.
Since the end of 2016, gold has traded with a series of higher lows on multiple occasions. However, each rally following the conclusion of a correction was unable to trade to a higher high. Wednesday’s high at $1,369.30 was, in fact, the closest gold prices have come close to the former high.
It is the geopolitical events that have fueled this current rally and could ultimately take gold above the high achieved in 2016.
On a technical basis, that would confirm that the lows achieved at the end of 2015 were the absolute conclusion of the multiyear correction. That is why this week’s high is so significant.
Currently, gold is once again becoming a safe haven-asset reacting to the strong possibility that the United States will initiate a military response to the recent chemical weapon use in Syria.
The current crisis is much different from the response President Trump took after a chemical weapon attack by Syria last year. The Russians responded to a potential U.S. attack by warning that missiles fired into Syria would be shot down and their launch sites targeted. It is the last part of that statement that is so worrisome.
Obviously, a retaliatory strike by Russia targeting either U.S. carriers or airplanes could be catastrophic and devastating globally. It is for that reason that the United States is working with allies to create a unified plan for a military strike.
Whatever the outcome of this current crisis, I fear that it will get worse before it gets better, which would be bullish for gold. Addressing that fact, Daniela Cambone, Editor in Chief of Kitco News, made the most appropriate comment in her commentary today titled “Be Careful What You Wish For.”
Wishing you as always, good trading,
PRECIOUS-Gold on track for second weekly gain as Syria concerns linger
* SPDR Gold holdings highest in 10 months
* Palladium set for biggest weekly rise since January 2017
* GRAPHIC-2018 asset returns: (Updates throughout, changes dateline from BENGALURU) By Zandi Shabalala LONDON, April 13 (Reuters) - Gold prices rose on Friday and were headed for their second weekly gain as investors sought safety from security tensions over Syria. U.S. President Donald Trump and his national security aides on Thursday discussed options on Syria, where he has threatened missile strikes in response to a suspected poison gas attack, as a Russian envoy voiced fears of wider conflict between Washington and Moscow. Trump, however, cast doubt over the timing of his threatened strike on Syria on Thursday, by tweeting that an attack on Syria "could be very soon or not so soon at all". "Donald Trump back-pedalled a bit in his morning tweet yesterday but the danger is still there that situation could escalate with Russia due to a military attack on Syria," said Quantitative Commodity Research consultant Peter Fertig. "We are back at a Cold War which easily could turn into a hot war if someone loses their nerve and in such a situation gold is a haven." Gold is often used as store of value in times of political and financial uncertainty. Spot gold was up 0.4 percent at $1,340.79 an ounce as of 0930 GMT, and was set for a weekly gain of around half a percent. U.S. gold futures were steady at $1,343.70 an ounce. Global stocks were poised for their biggest weekly gain in over a month, as investors shrugged off tensions while the dollar slipped, boosting commodities. Easing concerns over the trade war between China and the United States also weighed on gold in the previous session. Trump said on Thursday that trade "negotiations" between Washington and Beijing were going well. Meanwhile, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.69 percent to 865.89 tonnes on Thursday. Holdings rose to their highest since June 2017 and were up about 3.5 percent so far this year, suggesting an increase in investor appetite for the metal, seen as a safe investment during times of financial and political uncertainties.
In other precious metals, spot silver rose 0.7 percent to $16.54 per ounce, up over 1 percent so far this week. Platinum was 0.8 percent higher at $931.90 an ounce. For the week, the metal was set for more than a 1 percent rise, the most in about two months. Palladium climbed 1.3 percent at $976.10 an ounce and was on track for more than an 8 percent rise this week, its best since January 2017.
Gold below $1,340 as threat of US airstrike on Siyria diminishes
APRIL 12, 2018 2:33 PM EST
Gold retreats as there is no imminent threat of a US attack on Syria for now.
Hawkish FOMC minutes on Wednesday were negative for gold.
Gold continued on Thursday its reversal down started on Wednesday after it tested January’s highs at $1,375.70. It is currently trading back below the $1,340 level at around $1,336.40 down 1.23% on the day.
Sending gold higher on Wednesday was the imminent threat of an airstrike on Syria by the US. However, Trump, early Thursday said in a tweet that the strike was not that imminent.
“Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?” Tweeted Trump.
The tensions in the Middle-East have been soaring since last Sunday when a suspected chemical attack took place in Syria, allegedly led by Bashar al-Assad, Syrian President.
On the macroeconomic front, the FOMC minutes on Wednesday where largely hawkish and higher interest rates are generally seen as a negative for gold which is a non-yielding asset.
“It would appear the central bank (Fed) has laid the groundwork for another rate hike in June, which would leave them six months to implement the third that is forecast and also leave room for a fourth if it’s deemed necessary by the data in the interim. That may be providing some relief for the greenback in the near-term but it’s really struggling to gather any upward momentum.” Commented Craig Erlam, a senior market analyst at Oanda.
Gold 4-hour chart
The short-term momentum is rather bearish. Resistance is seen at the $1,350 psychological figure and at $1,365.70 high made on Wednesday. Immediate support is the $1,335 level and then $1,326.60 swing low followed by $1,319.30 cyclical low.
Gold reverses a major part of previous session’s strong gains
APRIL 12, 2018 8:53 AM EST
• A strong USD rebound prompts some aggressive selling.
• Improving risk-appetite adds to the downward pressure.
• Gains some respite from disappointing US weekly jobless claims.
Gold extended its steady decline through the mid-European session and retreated farther from YTD highs, retested in the previous session.
A strong US Dollar rebound, following the release of latest FOMC meeting minutes, prompted some aggressive selling during the NY trading on Wednesday. The greenback continued gaining positive traction on Thursday and kept exerting downward pressure on dollar-denominated commodities – like gold.
This coupled with growing bets for a faster Fed monetary policy tightening cycle and a modest uptick in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal.
Moreover, a slight improvement in investors' risk-appetite, as depicted by a minor rebound in equity markets, further weighed on the precious metal's safe-haven appeal and did little to stall the downfall back closer to $1340 level.
The selling pressure abated, at least for the time being, following the release of higher than expected US weekly jobless claims data. Moving ahead, the USD price dynamics/broader market risk sentiment might continue to act as key determinants of the commodity's movement through Thursday's trading session.
Technical levels to watch
Weakness below $1340 level is likely to get extended towards $1332 horizontal level before the commodity eventually drops to test $1326-25 support area. On the upside, any up-move might continue to confront strong resistance near the $1352-53 region, above which the commodity seems to aim back towards retesting $1365-66 supply zone.
Kevin O’Leary Is Wrong; Gold Miners Will Outperform – Frank Holmes
Apr 11, 2018
Contrary to Shark Tank star Kevin O’Leary, Frank Holmes, CEO of U.S. Global Investors, sees gold mining stocks outperforming the physical bullion.
“Our smart Beta GOAU [exchange-traded fund] is really a classic of showing you you have to get rid of those companies that are not creating value per share,” Holmes said. “The royalty companies have done well and those stocks that basically show better revenue per share, reserves per share, production per share, they far outperform.”
On gold prices, Holmes said that there are several fundamental factors behind the recent rally in the yellow metal and has little to do with President Donald Trump’s tweets on Wednesday about the possible military strikes in Syria.The CEO of U.S. Global Investors maintains his long-term $1,500 an ounce gold call.
Gold bugs need correction in stocks on geopolitical risk for break of weekly resistance
APRIL 11, 2018 1:23 PM EST
Gold: up to the weekly resistamce line and awaits a drop in stock prices.
Gold: bulls eye $1,433.00.70 on the wide as geopolitical risks spell war on the horizon.
Gold has spiked on the latest geopolitical concerns that have sent risk sour. Gold bugs are just waiting for the stock markets to fall out from a stubborn period of consolidation causing the US yields to remain relatively robust. Nevertheless, Gold has picked up a safe haven bid to a key technical level on the sounds of the drums of war as Russia and US relations start to break down. Gold is currently trading at $1,354/oz having made a high of $1,365.33/oz vs a low of $1,338.60/oz.
The Trump administration has been working to marshal international support for a possible military strike against Syrian President Bashar al-Assad for an alleged chemical-weapons attack, a move that is rubbing the Russians up the wrong way who have warned and pleaded the US to refrain from military intervention or be prepared for retaliation.
"I would once again beseech you to refrain from the plans that you're currently developing," Moscow's UN envoy Vasily Nebenzia said on Tuesday.
He warned Washington that it will "bear responsibility" for any "illegal military adventure" it carries out.
President Donald Trump tweeted today that the relationship with Russia“is worse now than it has ever been, and that includes the Cold War":
Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!
Risk-off play is on the rise with a big spike in gold and WTI is making fresh YTD highs. However, stocks are climbing, (lead by tech stocks), and that is making for higher US yields, (US 10yrs -0.32% but at 2.7936%, up from 2.7534% low and below 2.8027% high) for now.
Bulls eye a test of $1366 level (YTD high) with $1,433.00.70 as next key target, 17th Aug weekly highs. For the near term, the techncial indicators are showing tiring signals althoughthe daily indicators marry up with te move and RSI turns towrads the 70 mark. However, on the downside, the $1,349 area guards the $1340 support area. The 21-D SMA supports at $1,331.934 while the price of the yellow metal keeps above the ascending 21-W SMA at $1312 at least.
Gold Prices Hit 2-Week Highs as US-Russia Tensions Spark Safe-Haven Demand
APRIL 11, 2018 1:18 PM EST
Investing.com – Gold prices jumped to a more than two-week high as signs of rising U.S. inflation were overshadowed by an uptick in safe-haven demand amid growing U.S.-Russia tensions.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose by $16.20, or 1.20%, to $1,362.10 a troy ounce, and remained close to session highs of $1,369.10.
Risk-off sentiment gripped markets on Wednesday after President Donald Trump threatened Russia, in a series of tweets, hinting at military action in Syria.
This comes after Trump, told reporters earlier this week, that he was preparing a response to reports of an alleged chemical weapons attack in Syria. “We have a lot of options, militarily. And we’ll be letting you know pretty soon,” Trump said.
Renewed demand for safe-haven buying comes as traders digested an uptick in inflation, which failed to provide a large enough bounce in the dollar to dent gold prices.
The core CPI rose 2.1% year-on-year in March, the largest since February 2017, improving on the 1.8% rise seen in February.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency, raising demand for the precious metal.
Investors were also awaiting the Federal Reserve’s March meeting minutes due 2.00 pm ET, for an insight into the Fed’s thinking on monetary policy.
In other precious metal trade, silver futures rose 1.35% to $16.79 a troy ounce, while platinum futures gained 0.30% to $935.90 an ounce.
Copper fell 0.80% to $3.11.
April 11, 2018
Overnight Markets and News
Jun E-mini S&Ps (ESM18 -1.03%) this morning are down -0.94% and European stocks are down -0.43% on concern about U.S. military escalation in Syria. President Trump spoke with UK Prime Minister May and French President Macron and cancelled a planned trip to South America as he intensifies preparations for a U.S. response to an alleged chemical weapons attack by the Syrian government on its own people. Russia warned that any U.S. missiles fired at Syria over a suspected chemicals weapons attack will be shot down and the launch sites targeted, raising the possibility of a U.S.-Russian confrontation. Also, Eurocontrol, an air traffic agency in Europe, asked airlines to apply caution on flights to the eastern Mediterranean region because of possible air strikes in Syria over the next 72 hours. Asian stocks settled mixed: Japan -0.49%, Hong Kong +0.55%, China +0.56%, Taiwan +0.43%, Australia -0.48%, Singapore +0.39%, South Korea -0.32%, India +0.18%.
The dollar index (DXY00 -0.14%) is down -0.08% at a 2-week low. EUR/USD (^EURUSD+0.23%) is up +0.21% at a 2-week high. USD/JPY (^USDJPY -0.39%) is down -0.35% as the slide in stocks boosts the safe-haven demand for the yen.
Jun 10-year T-note prices (ZNM18 +0-075) are up +6 ticks.
China Mar CPI rose +2.1% y/y, weaker than expectations of +2.6% y/y. Mar PPI rose +3.1% y/y, weaker than expectations of +3.3% y/y and the slowest pace of increase in 17 months.
UK Feb manufacturing production unexpectedly fell -0.2% m/m, weaker than expectations of +0.2% m/m and the largest decline in 11 months. Feb industrial production rose +0.1% m/m, weaker than expectations of +0.4% m/m.
Japan Mar PPI rose +2.1% y/y, stronger than expectations of +2.0% y/y.
Japan Feb core machine orders rose +2.1% m/m and +2.4% y/y, stronger than expectations of -2.5% m/m and unch y/y.
U.S. Stock Preview
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -3.3% to 388.1, purchase sub-index -2.1% to 252.3, refi sub-index -4.9% to 1,130.1), (2) Mar CPI (expected unch m/m and +2.4% y/y, Feb +0.2% m/m and +2.2% y/y) and Mar CPI ex food & energy (expected +0.2% m/m and +2.1% y/y, Feb +0.2% m/m and +1.8% y/y), (3) EIA weekly Petroleum Status Report, (4) Treasury auctions $21 billion of 10-year T-notes, (5) Mar monthly budget statement (expected -$186.0 billion, Feb -$215.2 billion), (6) minutes of the Mar 20-21 FOMC meeting.
Notable Russell 1000 earnings reports today include: Fastenal (consensus $0.61), Bed Bath & Beyond (1.40).
U.S. IPO's scheduled to price today: Alzheon (ALZH), Zuora (ZUO).
Equity conferences this week: J.P. Morgan Retail Round-Up Conference on Wed.
June S&P 500 E-minis (ESM18 -1.03%) this morning are down sharply by -25.00 points (-0.94%). Tuesday's closes: S&P 500 +1.67%%, Dow Jones +1.79%, Nasdaq +2.22%. The S&P 500 on Tuesday closed higher on comments from Chinese President Xi Jinping that eased fears of a U.S.-Chinese trade war when he pledged a "new phase of opening up" Chinese markets. There was also strength in energy stocks after crude oil prices rose by +3.30% to a 2-week high. Stocks were undercut by the rise in the U.S. Mar core PPI to +2.7% y/y, stronger than expectations of +2.6% y/y, which bolsters the case for additional Fed rate hikes.
June 10-year T-notes (ZNM18 +0-075) this morning are up +6 ticks. Tuesday's closes: TYM8 -4.50, FVM8 -3.25. Jun 10-year T-notes on Tuesday closed lower on reduced safe-haven demand after soothing trade comments by Chinese President Xi Jinping sparked a sharp rally in stocks. T-notes were also undercut by the +2.7% y/y increase in U.S. Mar core PPI, higher than expectations of +2.6% y/y and the largest year-on-year increase in 6-1/3 years, which was hawkish for Fed monetary policy.
The dollar (DXY00 -0.14%) this morning is down -0.071 (-0.08%) at a 2-week low. EUR/USD (^EURUSD +0.23%) is up +0.0026 (+0.21%) at a 2-week high and USD/JPY (^USDJPY -0.39%) is down -0.37 (-0.35%). Tuesday's closes: Dollar Index -0.251 (-0.28%), EUR/USD +0.0035 (+0.28%), USD/JPY +0.43 (+0.40%). The dollar index on Tuesday fell to a 1-1/2 week low and closed lower. The dollar was undercut by the CBO's hike in its U.S. budget deficit estimate to -$804 billion for the fiscal year through Sep, up from a Jun estimate of -$563 billion, and the hike in its 2019 U.S. budget deficit estimate to -$981 billion from -$689 billion. There was also strength in EUR/USD which climbed to a 1-1/2 wee high on hawkish comments from ECB Governing Council member Nowotny who said "now is the time for a gradual normalization of monetary policy."
Metals prices this morning are mixed with Jun gold (GCM18 +0.59%) +5.5 (+0.41%), May silver (SIK18 +0.08%) -0.011 (-0.07%) and May copper (HGK18 -0.06%) -0.004 (-0.13%). Tuesday's closes: Jun gold +5.80 (+0.43%), May silver +0.067 (+0.41%), May copper +0.600 (+1.95%). Metals prices on Tuesday closed higher with May silver at a 1-week high and May copper at a 3-week high. Metals prices were boosted by the decline in the dollar index to a 1-1/2 week low and by reduced concerns about a U.S. and China trade war, which is positive for economic growth and industrial metals demand. Copper prices received a boost from the -2,650 MT decline in LME copper inventories to a 2-week low of 369,525 MT, a sign of tighter supplies.
May crude oil prices (CLK18 +1.08%) this morning are up +53 cents (+0.81%) at a fresh 2-week high and May gasoline (RBK18 unch) is -0.0026 (-0.13%). Tuesday's closes: May crude +2.09 (+3.30%), May gasoline +0.0567 (+2.86%). May crude oil and gasoline on Tuesday climbed to 2-week highs and closed higher. Crude oil prices were boosted by the slide in the dollar index to a 1-1/2 week low, an easing of U.S.-Chinese trade war concerns, and expectations for Wednesday's weekly EIA crude inventories to decline by -1.5 million bbl.
Overnight U.S. Stock Movers
Fortinet (FTNT +3.23%) was downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.
Citigroup (C +1.54%) was upgraded to 'Buy' from 'Hold' at HSBC with a price target of $85.
eBay (EBAY +1.83%) was upgraded to 'Overweight' from 'Sector-Weight' at KeyBanc Capital Markets with a price target of $50.
Synaptics (SYNA +4.59%) was upgraded to 'Buy' from 'Neutral' at Mizuho Securities USA with a price target of $55.
Imperva (IMPV +0.46%) was rated a new 'Buy' at D.A. Davidson with a price target of $56.
Compass Minerals International (CMP +0.32%) gained nearly 0.5% in after-hours trading after it reported it sold 4.3 million tons of highway deicing products in Q1, a +22% y/y increase.
Analogic (ALOG +1.16%) dropped over 11% in after-hours trading after it announced that it had agreed to be acquired by Altaris Capital Partners LLC for $84 a share in cash, well below Tuesday's closing price of $96.05 a share.
Spectrum Pharmaceuticals (SPPI +41.90%) rose 3% in after-hours trading, on top of Tuesday's 41% surge, after it reported encouraging results in a Phase 2 study of its EGFR Exon 20 Mutant non-small cell lung cancer.
Invitae (NVTA -1.54%) rose over 3% in after-hours trading after holder Baker Bros Advisors LP filed a 13G with the SEC, which signals ownership of more than 5% of the company's outstanding stock.
Purple Innovation (PRPL +3.53%) was rated a new 'Outperform' at Wedbush with a price target of $11.
Babcock & Wilcox Enterprises (BW +0.80%) plunged over 30% in after-hours trading after it cut guidance on its 2018 adjusted Ebitda to $20 million to $40 million from a projection of $75 million to $95 million in March.
Fearful Investors Are Creating A Rush On Gold ETFs
Investors are on a buying spree and their preferred choice in these uncertain times is gold ETFs.
The popularity of gold-backed exchange-traded funds is at its highest level since 2013, Bloomberg reported.
On Monday, the gold ETFs tracked by the financial media company were on the fourth day of straight gains, the longest green streak since January.
One of the shining examples is Frankfurt-listed Xetra-Gold —the third-largest commodity-linked ETF — that saw its outstanding shares approach 177 million as of Monday, the most since the fund began to trade in 2007.
The key drivers pushing investors to opt for gold ETFs are trade war fears as well as increased geopolitical risks surrounding Russia and the Middle East, according to analysts.
"In the past few days, neither central banks’ monetary policy nor other events had much of an impact on the markets. In fact, markets moved in line with the news and opinions surrounding the trade conflict between the US and China,” said analyst at Deutsche Bank AG Michael Blumenroth in a note published on Xetra-Gold’s website on Friday.
“We’ve seen volatility risk in the stock market, and geopolitical risk concerning the situation in Russia and the Middle East,” Blumenroth added. “People have become nervous in Germany so they were buying gold.”
Other impressive gains came from China’s Bosera Gold ETF, which already added $610.8 million this year, putting it on track to see its biggest returns since being listed in Shenzhen in 2014.
Also, the well-known iShares Gold Trust ETF has seen an addition of $1.49 billion in 2018 — the most out of all commodity-linked ETFs.
Gold prices, in the meantime, proved to be resilient in light of a stock market rally this week. June Comex gold futures were last at $1,345.40, down 0.04% on the day, while spot gold on Kitco.comwas last at $1,341.40, up 0.16% on the day.
Gold saw gains on Tuesday despite investor risk appetite returning to the market, said Kitco’s senior technical analyst Jim Wyckoff.
“Gold and silver bulls should consider their metals’ performance so far this week as pretty impressive, given little risk aversion in the marketplace, at present,” Wyckoff said in his PM Roundup.
By Anna Golubova
Shark Tank Star Favors Bullion Over Gold Miners
Apr 10, 2018
Investors are better off holding physical gold rather than mining stocks, according to Shark Tank star and chairman of O’Shares ETFs, Kevin O’Leary.
O’Leary said gold miners have had a track record of bad management and poor cost control that have led to underperformance relative to physical gold. The Shark Tank investor himself maintains 5% of his portfolio in physical gold, using a combination of bullion and SPDR Gold Shares (NYSE: GLD), the world’s largest gold-backed exchange-traded fund.
“The history of mining has been abysmal,” O’Leary told Kitco News on the sidelines of the “Three Sharks In A Castle” symposium. “The value of the commodity is whatever it is every day. I don’t need to have a manager in the middle screwing up his capital cost allowance, not controlling his costs.”
April 10, 2018
Overnight Markets and News
Jun E-mini S&Ps (ESM18 +1.08%) this morning are up sharply by +1.06% and European stocks are up +0.69% at a 3-week high as global stock markets rallied after comments from Chinese President Xi Jinping eased fears of a trade war between the U.S. and China. Xi pledged a "new phase of opening up" in his keynote address today to the Boao Forum for Asia and warned against returning to a "Cold War mentality" amid trade disputes. Xi pledged to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property. Energy stocks are higher with May WTI crude oil (CLK18 +1.99%) up +1.20% to a 1-week high and mining stocks are stronger as well with May COMEX copper (HGK18 +1.41%) up +0.70% at a 3-week high. Asian stocks settled higher: Japan +0.54%, Hong Kong +1.65%, China +1.66%, Taiwan +0.31%, Australia +0.83%, Singapore +0.48%, South Korea +0.16%, India +0.27%. Conciliatory comments from Chinese President Xi Jinping fueled gains in Asian stocks as Japan's Nikkei Stock Index climbed to a 4-week high.
The dollar index (DXY00 -0.05%) is unchanged. EUR/USD (^EURUSD +0.40%) is up +0.06% at a 1-week high on hawkish comments from ECB Governing Council member Nowotny who said now is the time for a gradual normalization of monetary policy." USD/JPY (^USDJPY +0.20%) is up +0.24% as the rally in global stocks curbs the safe-haven demand for the yen.
Jun 10-year T-note prices (ZNM18 -0-005) are down -2.5 ticks.
ECB Governing Council member Nowotny said "the Eurozone economy today clearly is in the middle of a strong and broad-based cyclical upswing" and "now is the time for a gradual normalization of monetary policy."
UK Mar BRC sales like-for-like unexpectedly rose +1.4% y/y, stronger than expectations of -0.3% y/y and the biggest increase in 6 months.
Japan Mar machine tool orders rose +28.1% y/y, the seventeenth consecutive month orders have gained.
U.S. Stock Preview
Key U.S. news today includes: (1) Dallas Fed President Robert Kaplan (non-voter) speaks in Beijing, (2) Mar PPI final demand (expected +0.1% and +2.9% y/y, Feb +0.2% m/m and +2.8% y/y) and Mar PPI ex food & energy (expected +0.2% and +2.6% y/y, Feb +0.2% m/m and +2.5% y/y), (3) Feb wholesale trade sales (Jan -1.1% m/m) and revised Feb wholesale inventories (expected +0.8%, prelim +1.1% m/m), (4) USDA Apr WASDE crop production, (5) Treasury auctions $30 billion of 3-year T-notes.
Notable Russell 1000 earnings reports today include: MSC Industrial Direct (consensus $1.32).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: IPAA Oil & Gas Conference on Mon-Tue, Sanford C. Bernstein & Co. Software Summit on Tue, UBS Chicago Utility Mini Conference on Tue, ACAMS 23RD Annual International AML & Financial Crime Conference on Tue, J.P. Morgan Retail Round-Up Conference on Wed.
June S&P 500 E-minis (ESM18 +1.08%) this morning are up +27.75 points (+1.06%). Monday's closes: S&P 500 +0.33%%, Dow Jones +0.19%, Nasdaq +0.61%. The S&P 500 on Monday closed higher on reduced trade tensions after Larry Kudlow, President Trump's top economic adviser, said the U.S. and China are holding "back-channel discussions" to resolve their differences. There was also carry-over support from a rally in European stocks on upbeat comments from ECB President Draghi who said the ECB "expects the pace of economic expansion in the Eurozone to remain strong in 2018." Energy stocks saw support as crude oil prices rallied +2.19%.
June 10-year T-notes (ZNM18 -0-005) this morning are down -2.5 ticks. Monday's closes: TYM8 -3.5, FVM8 -2.5. Jun 10-year T-notes on Monday closed lower on reduced safe-haven demand after stocks moved higher and on supply pressures as the Treasury auctions $64 billion of T-notes and T-bonds this week.
The dollar this morning is little changed with the dollar index (DXY00 -0.05%) unch, EUR/USD (^EURUSD +0.40%) up +0.0007 (+0.06%) and USD/JPY (^USDJPY +0.20%) up +0.26 (+0.24%). Monday's closes: Dollar Index -0.270 (-0.30%), EUR/USD +0.0040 (+0.33%), USD/JPY -0.16 (-0.15%). The dollar index on Monday closed lower on strength in EUR/USD on upbeat comments from ECB President Draghi who said the ECB "expects the pace of economic expansion in the Eurozone to remain strong in 2018." There was also strength in GBP/USD which rallied to a 1-week high after UK Mar Halifax home prices rose a more-than-expected +1.5% m/m, the biggest increase in 7-months, which is hawkish for BOE monetary policy.
Metals prices this morning are mixed with Jun gold (GCM18 +0.04%) -1.1 (-0.08%), May silver (SIK18 -0.15%) -0.054 (-0.33%) and May copper (HGK18 +1.41%) +0.022 (+0.70%) at a 3-week high. Monday's closes: Jun gold +4.00 (+0.30%), May silver +0.151 (+0.89%), May copper +1.60 (+0.51%). Metals on Monday closed higher on a weaker dollar and on continued safe-haven demand for precious metals on the U.S. trade turmoil.
May crude oil prices (CLK18 +1.99%) this morning are up +76 cents (+1.20%) at a 1-week high and May gasoline (RBK18 +1.35%) is +0.0165 (+0.83%) at a 1-week high. Monday's closes: May crude +1.36 (+2.19%), May gasoline +0.0295 (+1.51%). May crude oil and gasoline on Monday closed higher on a weaker dollar and the rally in stocks, which shows confidence in the economic outlook that is positive for energy demand.
Overnight U.S. Stock Movers
Becton Dickinson (BDX +0.88%) was upgraded to 'Buy' from 'Neutral' at Citigroup with a price target of $251.
NVIDIA (NVDA +0.54%) gained nearly 2% in after-hours trading after it was raised to 'Overweight' from 'Equal-Weight' at Morgan Stanley with a price target of $238.
Goldman Sachs (GS +0.89%) may open higher this morning after it was recommended with an 'Outperform' rating at Bernstein with a price target of $300.
CME Group (CME +0.58%) was rated a new 'Outperform' at Bernstein with a price target of $190.
Intercontinental Exchange (ICE +0.38%) was rated a new 'Outperform' at Bernstein with a price target of $85.
Live Nation (LYV -1.14%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
Etsy (ETSY -0.11%) may open higher this morning after it was rated a new 'Buy' at Loop Capital Markets with a price target of $32.
Seagate Technology (STX -0.58%) may open higher this morning after it was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley with a price target of $72.
United Airlines (UAL -0.16%) reported March consolidated traffic rose +6.5% and said it sees Q1 capacity increasing +3.6% and prasm rising +2.7%
Tupperware Brands (TUP -0.38%) fell almost 5% in after-hours trading after it said it sees preliminary Q1 adjusted EPS of 87 cents to 92 cents, weaker than a prior estimate of $1.01 to $1.06.
Energous (WATT +5.25%) surged almost 20% in after-hours trading after it said it received FCC certification for its 900 MHz WattUp Near Field transmitter.
EMCORE Corp (EMKR unch) tumbled more than 10% in after-hours trading after it reported Q2 preliminary revenue of $18 million to $19 million, lower than previous guidance of $21 million to $23 million, citing significant demand shortfall from one major customer.
Pingtan Marine Enterprises Ltd (PME +9.61%) rallied over 16% in after-hours trading after it increased its current production capacity as it said 27 fishing vessels are now approved to operate in international waters of the Indian Ocean.
April 9, 2018
Overnight Markets and News
Jun E-mini S&Ps (ESM18 +0.59%) this morning are up +0.53% and European stocks are up +0.35% as global stock markets rally on reduced trade concerns between China and the U.S. President Trump's top economic adviser, Larry Kudlow, said Friday that the U.S. and China are holding "back-channel discussions" to resolve an escalating trade dispute and President Trump tweeted Sunday that "he and Chinese President Xi will always be friends, no matter what happens with our dispute on trade." The markets will look to Tuesday's speech by Chinese President Xi at the Boao forum for Asia for clues to China's response to solve the trade dispute with the U.S. Russia's benchmark MOEX Stock Index plunged nearly 7% today after the U.S. imposed new sanctions on Kremlin-connected billionaires and as tensions rose between the U.S. and Russia following the latest chemical attack in Syria. Asian stocks settled higher: Japan +0.51%, Hong Kong +1.29%, China +0.23%, Taiwan +0.67%, Australia +0.34%, Singapore +0.22%, South Korea +0.59%, India +0.48%.
The dollar index (DXY00 -0.39%) is up +0.10%. EUR/USD (^EURUSD -0.03%) is down -0.08%. USD/JPY (^USDJPY +0.16%) is up +0.15%.
Jun 10-year T-note prices (ZNM18 -0-050) are down -4 ticks.
Chicago Fed President Evans aid the Fed should continue gradually raising interest rates if data on consumer prices indicate inflation will soon reach its 2% target. He added, "the headwinds that we were facing have turned into tailwinds, fiscal policy has been much more supportive of further growth, and so the need for more accommodative monetary policy is less than it was before."
Eurozone Apr Sentix investor confidence fell -4.4 to a 14-month low of 19.6, weaker than expectations of -3.2 to 20.8.
The German Feb trade balance was in surplus by +18.4 billion euros, narrower than expectations of +20.1 billion euros. Feb exports unexpectedly fell -3.2% m/m, weaker than expectations of +0.4% m/m and the biggest decline in 2-1/3 years. Feb imports fell -1.3%, weaker than expectations of +0.5% and the biggest decline in 8 months.
U.S. Stock Preview
Key U.S. news today includes: (1) USDA weekly grain export inspections, (2) USDA weekly Crop Progress.
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: Mizuho Energy Summit on Mon, IPAA Oil & Gas Conference on Mon-Tue, Sanford C. Bernstein & Co. Software Summit on Tue, UBS Chicago Utility Mini Conference on Tue, ACAMS 23RD Annual International AML & Financial Crime Conference on Tue, J.P. Morgan Retail Round-Up Conference on Wed.
June S&P 500 E-minis (ESM18 +0.59%) this morning are up +13.75 points (+0.53%). Friday's closes: S&P 500 -2.19%%, Dow Jones -2.34%, Nasdaq -2.45%. The S&P 500 on Friday closed sharply lower after President Trump late Thursday announced that he is considering tariffs on another $100 billion of Chinese products. Stocks were also undercut by the weak March payroll report of +103,000 and the net -50,000 downward revision to Jan-Feb payrolls.
June 10-year T-notes (ZNM18 -0-050) this morning are down -4 ticks. Friday's closes: TYM8 +14.5, FVM8 +8. Jun 10-year T-notes on Friday closed with solid gains due to the fresh trade turmoil and the sharp sell-off in the U.S. stock market. T-notes were also boosted by the weak March payroll report of +103,000 and the -50,000 net downward revision in Jan-Feb payrolls. T-note prices were undercut after Fed Chair Powell in a speech on Friday called for a continued slow rise in interest rates and said that it is too early to consider any impact from tariffs.
The dollar this morning is higher with the dollar index (DXY00 -0.39%) up +0.094 (+0.10%), EUR/USD (^EURUSD -0.03%) down -0.0010 (-0.08%) and USD/JPY (^USDJPY +0.16%) up +0.16 (+0.15%). Friday's closes: Dollar Index -0.352 (-0.39%), EUR/USD +0.0041 (+0.33%), USD/JPY -0.46 (-0.43%). The dollar index on Friday fell back from Thursday's 5-week high and closed moderately lower on renewed U.S. trade turmoil and the sharp sell-off in U.S. stocks. The dollar was also undercut by the weak U.S. payroll report and the decline in the U.S. T-note yield, which undercut the dollar's interest rate differentials.
Metals prices this morning are mixed with Jun gold (GCM18 -0.30%) -4.6 (-0.34%), May silver (SIK18 -0.23%) -0.057 (-0.35%) and May copper (HGK18 +0.20%) +0.005 (+0.16%). Friday's closes: Jun gold +7.60 (+0.57%), May silver +0.007 (+0.04%), May copper -1.60 (-0.52%). Metals on Friday closed mixed. Gold prices were boosted by safe-haven demand after President Trump's threat for tariffs on another $100 billion of Chinese goods caused a sharp sell-off in stocks. Copper prices fell on the diminished economic outlook caused by the fresh trade turmoil.
May crude oil prices (CLK18 +0.82%) this morning are up +16 cents (+0.26%) and May gasoline (RBK18 +0.58%) is +0.0022 (+0.11%). Friday's closes: May crude -1.48 (-2.33%), May gasoline -0.0269 (-1.36%). May crude oil and gasoline on Friday closed sharply lower on President Trump's new Chinese tariff threat, which could cause China to retaliate by slapping tariffs on U.S. crude oil and LNG exports. Crude oil prices also saw carry-over pressure from Wednesday's EIA report showing that U.S. oil production rose by +0.3% w/w to a new record high. Friday's Baker Hughes report was bearish since it showed that the number of active oil rigs jumped by 11 rigs to a 3-year high of 808 rigs.
Overnight U.S. Stock Movers
General Motors (GM -0.84%) is up over 2% in pre-market trading after it was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley with a price target of $48.
Agilent (A -3.09%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
TD Ameritrade Holding Co (AMTD -2.69%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch with a price target of $66.
Discover Financial Services (DFS -2.48%) was upgraded to 'Equal-Weight' from 'Underweight' at Stephens with a price target of $73.
Franklin Resources (BEN -2.44%) was downgraded to 'Neutral' from 'Buy' at Bank of America/Merrill Lynch.
Regeneron (REGN -2.73%) was downgraded to 'Market Perform' from 'Outperform' at Raymond James.
Boeing (BA -3.06%) received a $12.3 billion deal for 47 dreamliners from American Airlines.
InteractiveCorp (IAC -2.04%), Barry Diller's media company, is trading at a discount, according to a weekend article by Barrons.
Smartphone chipmakers such as Skyworks Solutions (SWKS -3.28%), Qorvo (QRVO -2.37%), Qualcomm (QCOM -3.49% and Synaptics (SYNA -3.72%) will struggle this year due to weak phone sales, according to a weekend article by Barrons. However, the article spoke favorably about phone screen maker Universal Display (OLED -2.99%) due to its favorable valuation after this year's 43% drop.
China Internet (CIFS -8.61%) rallied 2% on some short-covering in after-hours trading, trimming Friday's regular-session 8.6% drop on a Muddy Waters tweet that the noted short-seller remains short.
Cesca Therapeutics (KOOL -0.60%) fell 7% in after-hours trading after news the company filed to offer up to $20 million worth of shares.
April 6, 2018
Overnight Markets and News
June S&P 500 E-minis (ESM18 -0.98%) this morning are down -0.9% after President Trump late Thursday told U.S. Trade Representative Lighthizer to consider whether to add tariffs on another $100 billion worth of Chinese goods as punishment for China on Wednesday announcing reciprocal tariffs on $50 billion of U.S. goods. China early Friday responded with a statement saying, "The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new countermeasures, to firmly defend the interest of the nation and its people."
The problem for China is that tariffs on $150 billion of U.S. imports would max out its capability to levy tariffs since China has only ever annually imported more than $150 billion of U.S. goods twice. The U.S., by contrast, can ramp its levies up to the full amount of the $500 billion of Chinese products that the U.S. imported last year. However, China could use other means of retaliation such as clamping down on U.S. businesses that produce and sell goods within China and shutting down outbound Chinese tourism to the U.S. There is also the perennial threat that China owns some $1.3 trillion of U.S. government securities that it could dump on the market and cause an upward spike in U.S. interest rates.
The Euro Stoxx 50 index is down by -0.6%, showing a smaller decline than U.S. S&P E-minis. Asian stocks largely took President Trump's $100 billion threat in stride. Japan's Nikkei index closed only -0.4% lower today and Hong Kong's Hang Seng index closed up +1.11%. The Chinese mainland stock markets were closed again on Friday for a national holiday and haven't traded since China after Wednesday's close announced its tariff retaliation on $50 billion of U.S. goods. Other Asian stock markets today closed mixed: Australian S&P 200 unchanged, Singapore Str. Times +1.08%, South Korea KOSPI 200 -0.46%, India BSE Sensex 30 +0.09%, and Turkey ISE National 100 -0.13%.
The forex markets are showing little reaction to President Trump's new $100 billion tariff threat. The dollar index (DXY00 +0.03%) and EUR/USD (^EURUSD -0.06%) this morning are little changed. EUR showed little reaction to this morning's weak European economic data that included a -1.6% m/m decline in the German Feb industrial production report and a -2.2 point decline to 50.1 in the March Markit Eurozone retail PMI. USD/JPY (^USDJPY -0.03%) is slightly lower by -0.07 (-0.07%). June 10-year T-notes (ZNM18 +0-025) are up by only 2 ticks.
U.S. Stock Preview
Key U.S. news today includes: (1) Mar non-farm payrolls (expected +185,000, Feb +313,000) and Mar unemployment rate (expected -0.1 to 4.0%, Feb unch at 4.1%), (2) Mar avg hourly earnings (expected +0.3% m/m and +2.7% y/y, Feb +0.1% m/m and +2.6% y/y), (3) Fed Chair Jerome Powell delivers speech on the economic outlook during a visit to Chicago, (4) Feb consumer credit (expected +$15.5 billion, Jan +$13.906 billion).
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
June S&P 500 E-minis this morning are down -0.9% on President Trump's threat to levy tariffs on another $100 billion of Chinese goods. Thursday's closes: S&P 500 +0.69%, Dow Jones +0.99%, Nasdaq +0.53%. The S&P 500 on Thursday closed moderately higher on attempts by various Trump administration officials to soothe the markets by saying that the U.S. intends to negotiate with China on the tariffs and noting that there is a 2-month public comment period. U.S. stocks were also helped by the ability of most overseas stock markets to show sharp recoveries. The widening of the Feb U.S. trade deficit was a negative for Q1 GDP growth.
June 10-year T-notes are up by only 2 ticks. Thursday's closes: TYM8 -8.5, FVM8 -5. Jun 10-year T-notes on Thursday closed moderately lower on the upward rebound in stocks, the +3 bp rise in expectations for Fed tightening through end-2019 on a calmer trade situation, and a +2 bp rise in the 10-year breakeven inflation expectations rate.
The forex markets are showing little reaction to President Trump's new $100 billion tariff threat. The dollar index and EUR/USD this morning are little changed. Thursday's closes: Dollar Index +0.318 (+0.35%), EUR/USD -0.0038 (-0.31%), USD/JPY +0.57 (+0.61%). The dollar index on Thursday broke out to a 5-week high and closed moderately higher on reduced trade tensions and on the +3 bp rise in the 10-year T-note yield to 2.83%, which improved the dollar's interest rate differentials. The dollar was undercut by the widening of the U.S. trade deficit to a 9-year high.
Gold this morning is not seeing any safe-haven buying and is down by -1.1 (-0.08%). May silver is down -0.095 (-0.58%) and May copper is down -0.040 (-1.30%). Thursday's closes: Jun gold -11.70 (-0.87%), May silver +0.101 (+0.62%), May copper +6.40 (+2.13%). Metals on Thursday closed mixed. Gold prices were undercut by reduced trade tensions, while copper rallied on hopes for a negotiated solution.
May crude oil this morning is down -0.42 (-0.66%) and May gasoline is down -0.0112 (-0.57%). Thursday's closes: May crude +0.17 (+0.27%), May gasoline +0.0048 (+0.24%). May crude oil and gasoline on Thursday closed higher on reduced trade tensions and on carry-over support from Wednesday's EIA report showing a -4.6 mln bbl drop in U.S. oil inventories, which left inventories -2.6% below the 5-year seasonal average, the tightest level in 9-1/2 years. Crude oil prices were undercut by carry-over weakness from Wednesday's EIA report showing that U.S. oil production in the latest week rose by +0.3% w/w to a new record high of 10.460 mln bpd.
Overnight U.S. Stock Movers
Wynn Resorts (WYNN +0.92%) is up +2% in pre-market trading after MGM Resorts reportedly expressed an interest in Wynn Resorts.
Tesla (TSLA +6.54%) is down -2% in pre-market trading after news that a fire on Tuesday briefly suspended production.
Incyte (INCY -1.08%) plunged -20% in pre-market trading after news that its cancer-drug epacadostat study failed to meet its endpoint.
Xilinx (XLNX -0.62%) is down -3% in pre-market trading after a downgrade to Underweight at JPMorgan.
Palatin Technologies (PTN +1.69%) is up +7% in pre-market trading after receiving a new Buy rating at HC Wainwright.
Sunrun (RUN +1.22%) is down 6% in pre-market trading after a downgrade to Underperform from BofAML.
WD-40 (WDFC +1.53%) fell -2% in after-hours trading on news that the company's gross margin is seeing some pressure.
Codexis (CDXS -0.93%) fell -5% in after-hours trading after reporting preliminary Q3 net sales of $181 million, below the consensus of $188 million.
Gain Capital (GCAP +1.16%) rallied 5% in after-hours trading on news it expanded its cryptocurrency offerings.
Gold Prices Slide as Safe Haven Demand Fizzles
APRIL 5, 2018 10:50 AM EST
Investing.com – Gold prices fell on Thursday as risk appetite recovered amid investor bets that recent tariff announcements by the U.S. and China are negotiating tactics and the countries will ultimately reach a compromise.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were last down by $13.10, or around 1%, to $1,327.20 a troy ounce at 10:46AM ET (14:46GMT).
Prices of the precious metal had rallied to a one-week high on Wednesday after China announced a fresh wave of tariffs on U.S. imports, in retaliation to a Trump administration plan to impose tariffs on Chinese products.
Worries that protectionist trade policies might result in a full blown trade war boosted safe haven demand for gold, amid fears over the impact on the global economy and U.S. growth.
But trade tensions eased after President Donald Trump’s chief economic adviser Larry Kudlow said late Wednesday that proposed tariffs on China may not actually take effect and added that there is not a trade war between the U.S. and China.
Market sentiment was also helped by hopes that the U.S. could reach a deal with Canada and Mexico over the North American Free Trade Agreement.
The decrease in trade tensions lowered demand for the safe haven asset which is usually sought out as a store of value during times of political or economic uncertainty.
Also weighing on gold prices, the dollar rebounded on Thursday as worries cooled off. A stronger greenback makes the dollar-denominated metal more expensive for holders of other currencies.
At 10:39AM ET (14:39GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.21% to 89.66.
The greenback saw little movement after mixed data out of the weekly jobless claims’ data. Although new applications for U.S. unemployment benefits increased more than expected last week, the total number of Americans in unemployment fell to its lowest level since 1973.
Investors were turning their attention to the more comprehensive official government report that will be released on Friday. Economists expect the creation of 190,000 nonfarm payrolls.
Signs of increasing wage growth in that report could underline the case for the Federal Reserve to raise interest rates at a faster pace.
Furthermore, Fed chairman Jerome Powell will have an opportunity to comment on the employment report in an appearance scheduled after the release on Friday, which could determine the direction of the U.S. currency.
Expectations of rising rates tend to boost the dollar by making the currency more attractive to yield-seeking investors. At the same time, gold suffers due to not only the weaker greenback but tends to be less attractive as a non-yield bearing asset with rates on the rise.
Elsewhere in metals trading, silver gained 0.10% to $16.270 a troy ounce by 10:48AM ET (14:48GMT), platinum dropped 0.38% at $914.60 a troy ounce, palladium traded down 1.29% to $906.10 a troy ounce, while copper jumped 1.71% to $3.063 a pound.
Gold extends slide, eyes last week lows
APRIL 5, 2018 11:43 AM EST
Positive mood on markets weigh on gold.
Stronger US dollar also pushed the yellow metal lower.
After a brief period of stabilization, gold prices resumed the decline. It printed a fresh low at $1,322.60/oz after the beginning of the US session. It was holding near the lows, under pressure.
Gold is back near last week lows. Yesterday’s rally that followed the announcement of Chinese authorities to impose tariffs on 106 US products, gold rallied. But those gains were short-lived. The recovery in equity markets that start after US officials mentioned their desire for communication eased concerns about a full-blown trade war. The yellow metal reversed sharply. From yesterday’s highs it has fallen $25.
Today the positive tone in US stocks remains high. The DOW JONES was up 1.38% and the NASDAQ 0.85%. The sentiment affected gold that is also being hit by a stronger greenback. DXY Futures rose back above 90.00, to the highest in almost a month.
Levels to watch
XAU/USD moved closer to last week lows, located slightly above $1,320. A break lower could clear the way for $1,314 and under that level the next key support might be seen at $1,307. If price manages to hold on top of $1,320 it could recover some ground. Immediate resistance might lie at $1,331 followed by $1,339 and $1,345 (Apr 2 high).
April 5, 2018
Overnight Markets and News
June S&P 500 E-minis (ESM18 +0.45%) are trading mildly higher by +0.4% this morning on reduced trade-war anxiety and carry-over support from sharp rallies in overseas stocks. The Euro Stoxx 50 index is up +1.8%. The Chinese stock markets are closed today and tomorrow for a national holiday. However, other Asian stock markets today closed sharply higher: Japan Nikkei +1.53%, Australia S&P 200 +0.48%, Singapore Str. Times +1.97%, South Korea KOSPI 200 +1.46%, India BSE Sensex 30 +1.75%, Turkey ISE National 100 +0.71%.
The markets so far today are calmer on the U.S.-Chinese trade war front as hopes rise for a negotiated solution. Commerce Secretary Wilbur Ross and White House Economic Advisor Larry Kudlow spent most of Wednesday trying to calm market nerves by saying that the two sides will negotiate and that the tariffs are only a proposal so far. For its part, China on Wednesday only announced the tariffs and said they would only become effective if and when U.S. tariffs become effective.
The dollar index (DXY00 +0.17%) this morning is slightly higher by +0.05 (+0.06%) while EUR/USD (^EURUSD -0.14%) is unchanged. USD/JPY (^USDJPY +0.25%) is up +0.21 (+0.20%) on reduced safe-haven demand for the yen. June 10-year T-notes (ZNM18 -0-070) are down 7 ticks on reduced safe-haven demand in the calmer risk environment seen so far today.
Commodities overall this morning are up +0.14%. May WTI crude oil this morning is mildly lower by -0.20 (-0.32%) and May gasoline is down -0.0090 (-0.48%). Metals prices this morning are mixed with June gold down -7.4 (-0.55%) on the reduced risk environment, while May silver is slightly higher by +0.16 (+0.10%) and May copper is up +0.045 (+1.49%). Grains this morning are higher on reduced trade tensions and hopes for a negotiated solution with May corn up +1.50 (+0.39%), May soybeans up +4.75 (+0.47%), and May wheat up +4.25 (+0.93%). Softs are mostly higher this morning: May sugar +0.02 (+0.16%), May coffee +0.35 (+0.30%), May cocoa -13 (-0.53%), and May cotton +1.01 (+1.27%).
India's central bank today left its benchmark rate unchanged at 6%, which was in line with unanimous market expectations. The RBI left its benchmark rate unchanged despite mildly higher inflation of +4.4% (above the RBI's 4.0% target) since the economy is expected to slow to a 4-year low in 2018. However, the market is pricing in at least one rate hike for later this year since inflation is expected to pick up over the next few months. India's stock market rallied today as investors were buoyed by a less hawkish tone from the RBI and its move to reduce its inflation forecast and raise its GDP growth estimate for the new fiscal year that began in April.
U.S. Stock Preview
Key U.S. news today includes: (1) Mar Challenger job cuts (Feb -4.3% y/y), (2) weekly initial unemployment claims (expected +10,000 to 225,000, previous -12,000 to 215,000) and continuing claims (expected -28,000 to 1.843 million, previous +35,000 to 1.871 million), (3) Feb trade deficit (expected -$56.8 billion, Jan -$56.6 billion), (4) USDA weekly Export Sales, (5) Atlanta Fed President Raphael Bostic (voter) speaks on financial literacy at the University of South Florida Sarasota-Manatee.
Notable Russell 1000 earnings reports today include: Monsanto (consensus $3.29), RPM Intl (0.17), Lamb Weston (0.77).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
June S&P 500 E-minis are trading mildly higher by +0.4% this morning on reduced trade-war anxiety and carry-over support from sharp rallies in overseas stocks. Wednesday's closes: S&P 500 +1.16%, Dow Jones +0.96%, Nasdaq +1.57%. The S&P 500 on Wednesday closed sharply higher. U.S. stocks started Wednesday sharply lower after China surprised the markets by quickly announcing equal-sized retaliatory tariffs on U.S. products in response to the Trump administration's announcement late Tuesday of its list of $50 billion worth of Chinese products subject to tariffs. However, U.S. stocks were able to recover sharply during the day after Commerce Secretary Wilbur Ross and White House Economic Advisor Larry Kudlow did their best to reassure the markets that there will be negotiations and that the tariffs were only a proposal at this point. U.S. stocks also found support on the stronger-than-expected ADP report of +241,000 versus expectations of +210,000.
June 10-year T-notes are down 7 ticks on reduced safe-haven demand in the calmer risk environment seen so far today. Wednesday's closes: TYM8 -0.5, FVM8 -0.25. Jun 10-year T-notes on Wednesday closed slightly lower on the upward rebound in stocks and the stronger-than-expected ADP report of +241,000. T-notes found some support as another Fed official admitted that the U.S.-China tariff war is a material uncertainty for the economy.
The dollar index this morning is slightly higher by +0.05 (+0.06%) while EUR/USD is unchanged. USD/JPY is up +0.21 (+0.20%) on reduced safe-haven demand for the yen. Wednesday's closes: Dollar Index -0.058 (-0.06%), EUR/USD +0.0008 (+0.07%), USD/JPY +0.17 (+0.16%). The dollar index on Wednesday closed slightly lower on U.S. trade tensions as China quickly announced retaliatory tariffs. The dollar found some support, however, on the stronger-than-expected U.S. ADP report of +241,000. USD/JPY closed +0.16% higher as the safe-haven demand for the yen faded with the upward rebound in stocks.
Metals prices this morning are mixed with June gold down -7.4 (-0.55%) on the reduced risk environment, while May silver is slightly higher by +0.16 (+0.10%) and May copper is up +0.045 (+1.49%). Wednesday's closes: Jun gold +2.90 (+0.22%), May silver -0.138 (-0.84%), May copper -5.30 (-1.73%). Metals on Wednesday closed mixed. China's tariff announcement was bullish for gold but undercut silver and copper due to economic uncertainty that could hurt industrial metals demand.
May WTI crude oil this morning is mildly lower by -0.20 (-0.32%) and May gasoline is down -0.0090 (-0.48%). Wednesday's closes: May crude -0.14 (-0.22%), May gasoline +0.0027 (+0.14%). May crude oil and gasoline on Wednesday closed mixed. Crude oil prices traded sharply lower early in the session on the steep early stock market sell-off caused by the Chinese tariff announcement. However, crude oil prices were then able to partially recover as the stock market rallied and after the release of the bullish EIA report, which showed that U.S. oil inventories fell sharply by -4.6 mln bbls (vs expectations of +2.0 mln bbls). Crude oil prices were undercut, however, by news in the EIA report that U.S. oil production rose by +0.3% w/w to a new record high of 10.460 mln bpd.
Overnight U.S. Stock Movers
Facebook (FB -0.65%) is up 3% in pre-market trading after CEO Zuckerberg late Wednesday held a conference call to try to sooth investors and the public. A Deutschebank analyst says the worst is likely behind Facebook. Zuckerberg is expected to testify before a Congressional committee next week.
Spotify (SPOT -3.21%) is up 3% in pre-market trading after Stifel and Canaccord opened coverage with Buy ratings. Stifel sees "long runway for user growth." Spotify on Wednesday closed -3.21% after Tuesday's advance of +12.89%.
Finisar (FNSR +0.20%) is up 6% after an upgrade to Overweight by Morgan Stanley.
Marvell Tech (MRVL +1.86%) rallied 4% in after-hours trading after being rated as a new Buy at UBS with a price target of $38.
Delta (DAL +0.26%) said that some of its customer data may have been accessed
AMD (AMD +2.30%) is up 3% in pre-market trading after an upgrade to Buy at Stifel
Ollie's Bargain (OLLI +2.46%) was down 4% in after-hours trading after its fiscal-year adjusted EPS guidance was missed the consensus.
Gold Price Pare Gains as Dollar Steadies
APRIL 4, 2018 1:57 PM EST
Investing.com – Gold prices eased from sessions highs as the dollar pared some of its losses after trade war fears receded slightly.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose by $2.30, or 0.18%, to $1,339.80 a troy ounce.
Gold eased from a session high of $1,352.30 as trade war fears receded somewhat after traders questioned whether the recent tariffs announced by the U.S. and China were part of negotiation tactic.
Mizuho said Wednesday the US Treasury Department’s decision to extend the initial 30-day consultation period to 60 days was a sign that the “U.S. side has already left room for negotiation.”
China announced tariffs on 106 U.S. products after the Trump administration on Tuesday provided details on the $50 billion of Chinese goods that could be subject to 25% duties unless China makes trade and investment concessions.
Dovish comments from St. Louis Fed President James Bullard on Wednesday, drew a somewhat muted reaction in gold prices despite the Fed policymaker’s attempts to dampen investor expectations for further rate hikes.
“It is not necessary in this circumstance to raise the policy rate further in order to put downward pressure on inflation, since inflation is already below target,” Bullard said.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.
In other precious metal trade, silver futures fell 0.68% to $16.28 a troy ounce, while platinum futures fell 1.13% to $920.80 an ounce.
Copper fell 1.75% to $3.06.
Will Trump's Tariffs Affect Gold? - Peter Hug
Apr 04, 2018
Peter Hug Global Trading Director, Kitco Metals
Investors no longer believe that President Donald Trump’s proposed tariffs will be detrimental to markets, this according to Peter Hug, Director of Global Trading at Kitco Metals.“The market has basically reversed about 50% of the gains [in gold] since that announcement on the Chinese tariffs, [investors] believe that Trump’s bark is worse than his bite, and they don’t think it’s as serious,” Hug told Kitco News. “Got a rebound in stock markets and people took profits in gold.”Hug added that in this “difficult” market, investors should hold a percentage allocation in gold to hedge against the myriad of risks.What concerns Hug more is the London Interbank Offered Rate (LIBOR), which has steadily risen over the last three months.“If that starts to choke off credit facilities at the retail level, that could create a problem,” he said.
April 4, 2018
Overnight Markets and News
June S&P 500 E-minis (ESM18 -1.43%) this morning are sharply lower as China overnight very quickly retaliated to the Trump administration's announcement late Tuesday of the list of $50 billion worth of Chinese products subject to tariffs for IP violations. The Euro Stoxx 50 index this morning is down -1.27%.
China's retaliation was announced after some of the Far East Asian stock markets had already closed, which means that some of the Asian stock market closes do not reflect the news. The announcement was made about 20 minutes before the Hong Kong stock market closed, accounting for today's plunge in the Hang Seng index by -2.19%. Other Asian closes: Japan Nikkei index +0.13%, China Shanghai -0.18%, Australian S&P 200 +0.16%, Singapore -2.12%, South Korea KOSPI 200 -1.54%, India -1.05%, Turkey -1.05%.
China early Wednesday very quickly announced the list of 106 U.S. products worth about $50 billion that will be subject to an additional 25% tariff in retaliation for the U.S. tariffs on $50 billion worth of Chinese goods. The list of U.S. products subject to the new tariff includes soybeans, automobiles, chemicals, and aircraft. Other U.S. ag products subject to the tariff include wheat, corn, cotton, sorghum, tobacco, and beef. The U.S. sold about $14 billion worth of soybeans to China last year accounting for about one-third of the entire U.S. soybean crop.
Boeing's stock is sharply lower by -7% in overnight trading since the tariffs will apply to at least some Boeing jets. About one quarter of Boeing's aircraft sales deliveries last year were to China. Boeing's sharp drop accounts for the larger drop in Dow futures prices this morning versus S&P 500 futurs.
China said the implementation date for the tariffs will depend on when the U.S. levies its tariffs. The U.S. process is that there will be about a 60-day public comment period and then the U.S. Trade Representative has up to 6 months to decide on the final tariffs. Written public comments can be submitted until May 11 and a public hearing has been scheduled for May 15. That means there is still time for the two sides to negotiate to see if there is a compromise that could avert the tariffs.
The dollar index (DXY00 -0.12%) this morning is slightly lower by -0.102 (-0.11%) while EUR/USD (^EURUSD +0.07%) is up +0.0022 (+0.18%). USD/JPY (^USDJPY -0.35%) is down -0.46 (-0.43%) due to safe-haven buying of the yen. June 10-year T-note prices (ZNM18 +0-075) are up +8.5 ticks on safe-haven demand with the turmoil in stocks and on uncertainty about the impact of the tariffs on the U.S. economy and Fed policy.
May WTI crude oil this morning is down -1.21 (-1.91%) and May gasoline is down -0.0238 (-1.21%). Precious metals prices are higher this morning on safe-haven buying with June gold up +9.8 (+0.73%) and May silver up +0.033 (+0.20%). However, May copper is sharply lower by -0.071 (-2.30%).
In the ag markets, May corn is down -13.50 (-3.47%), May soybeans are down -44.25 (-4.26%), and May wheat is down -7.25 (-1.58%). Livestock futures have yet to open. Softs are lower with morning with May sugar down -0.11 (-0.88%), May coffee down -0.10 (-0.09%), May cocoa down -26 (-1.04%), and May cotton down -2.05 (-2.50%).
China was forced into a big $9.7 billion bailout of Anbang Insurance Group to save the company from insolvency after the government recently accused Anbang's former Chairman Wu Xiaohui with fraud for financing the company with unauthorized investment-type policies.
U.S. Stock Preview
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +4.8% with purchase sub-index +3.1% and refi sub index +7.3%), (2) Mar ADP employment (expected +210,000, Feb +235,000), (3) St. Louis Fed President James Bullard (non-voter) speaks on the economy and monetary policy to the Arkansas Bankers Association, (4) final-Mar Markit U.S. services PMI (expected +0.1 to 54.2, prelim-Mar -1.8 to 54.1), (5) Mar ISM non-manufacturing PMI (expected -0.5 to 59.0, Feb -0.4 to 59.5), (6) Feb factory orders (expected +1.7%, Jan -1.4% and +0.4% ex transportation), (7) EIA weekly Petroleum Status Report, (8) Cleveland Fed President Loretta Mester (voter) speaks on diversity in economics at Central State University in Wilberforce, OH.
Notable Russell 1000 earnings reports today include: Lennar (consensus $0.80), CarMax (0.87), Acuity Brands (2.09).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
June S&P 500 E-minis (ESM18 -1.43%) this morning are sharply lower by -1.7% after China quickly retaliated to the Trump administration's latest round of tariffs. Tuesday's closes: S&P 500 +1.26%, Dow Jones +1.65%, Nasdaq +1.06%. The S&P 500 on Tuesday closed sharply higher on some optimism that Asian and European stocks on Tuesday saw only minor losses compared with Monday's plunge in the U.S. stock market. There were also slightly reduced trade concerns after USTR Lighthizer said the administration has a long-term trade strategy. Automakers saw strength after reporting positive sales results.
June 10-year T-note prices (ZNM18 +0-075) are up +8.5 ticks on safe-haven demand with the turmoil in stocks and on uncertainty about the impact of the tariffs on the U.S. economy and Fed policy. Tuesday's closes: TYM8 -13.5, FVM8 -8.5. Jun 10-year T-notes on Tuesday closed with fairly sharp losses on the upward rebound in stocks, which reduced safe-haven demand for T-notes. T-note prices were also undercut by the +3 bp rise to 2.09% in the 10-year breakeven inflation expectations rate due in part to the +0.79% rally in May crude oil.
The dollar index (DXY00 -0.12%) this morning is slightly lower by -0.102 (-0.11%) while EUR/USD (^EURUSD +0.07%) is up +0.0022 (+0.18%). USD/JPY is down -0.46 (-0.43%) due to safe-haven buying of the yen. Tuesday's closes: Dollar Index +0.148 (+0.16%), EUR/USD -0.0032 (-0.26%), USD/JPY +0.72 (+0.68%). The dollar index on Tuesday closed mildly higher on reduced trade tensions and the upward rebound in U.S. stocks, which attracted some capital back to the U.S. The dollar was also boosted by the improvement in U.S. interest rate differentials with the fairly large rise in T-note yields. There was a solid +0.72% rally in USD/JPY on reduced safe-have demand for the yen due to the upward rebound in U.S. stocks.
Precious metals prices are higher this morning on safe-haven buying with June gold up +9.8 (+0.73%) and May silver up +0.033 (+0.20%). However, May copper is sharply lower by -0.071 (-2.30%). Tuesday's closes: Jun gold -9.60 (-0.71%), May silver -0.280 (-1.68%), May copper +1.35 (+0.44%). Metals on Tuesday settled mixed. Precious metals prices fell on reduced safe-haven demand caused by the rally in stocks. Precious metals prices also fell on long liquidation pressure after Monday's sharp rallies.
May WTI crude oil this morning is down -1.21 (-1.91%) and May gasoline is down -0.0238 (-1.21%). Tuesday's closes: May crude +0.50 (+0.79%), May gasoline +0.0080 (+0.41%). May crude oil and gasoline on Tuesday closed moderately higher on the the recovery in the U.S. stock market, which encouraged capital flows back into commodities, and on Bloomberg's report that OPEC's production in March fell by -170,000 bpd to a 1-year low 32.04 million bpd due in large part to Venezuelan production woes. Crude oil prices were undercut by the consensus that Wednesday's weekly EIA report will show a +2 million bbl rise in U.S. crude oil inventories.
Overnight U.S. Stock Movers
Boeing (BA +2.60%) is sharply lower in pre-market trading after China said it would slap a 25% tariff on U.S. products including aircraft.
Dave & Buster's (PLAY +1.50%) fell 3% in after-hours trading after issuing guidance for fiscal year revenue that was about 2% below the consensus.
Cloudera's (CLDR +4.76%) plunged 18% in after-hours trading after its annual revenue forecast was 4% below the consensus.
Aehr Test Systems (AEHR +1.34%) rallied 15% in after-hours trading on larger-than-expected Q3 revenue and news of a follow-on order.
Landec's (LNDC +1.53%) fiscal Q3 EPS report of 58 cents easily beat the consensus of 9 cents.
Viacom (VIAB -3.70%) fell marginally in after-hours trading after a report that CBS submitted its bid for Viacom, signaling the beginning of deal talks.
PTC Therapeutics (PTCT +0.58%) fell 4% in after-hours trading after a ratings downgrade from Barclays due to a lack of revenue upside.
April 3, 2018
Overnight Markets and News
June S&P 500 E-minis (ESM18 +0.39%) are trading higher by +0.50% this morning as some of the gloom from Monday dissipated and as overseas stock markets today did not fall as far as U.S. stocks did on Monday. The Euro Stoxx 50 index this morning is down -0.58%, which is a substantially smaller decline than Monday's -2.23% plunge in the S&P 500 index. Asian stocks this morning closed with losses of less than -1%: Japan Nikkei -0.45%, Hong Kong Hang Seng +0.29%, China Shanghai -0.84%, Taiwan TAIEX -0.61%, Australian S&P 200 -0.13%, Singapore Str. Times -0.54%, South Korea KOSPI 200 -0.20%, India Sensex 30 +0.35%, Turkey ISE National 100 +0.12%.
The dollar index (DXY00 +0.04%) this morning is trading slightly lower by -0.06 (-0.06%) and EUR/USD (^EURUSD unch) is slightly lower by -0.0011 (-0.09%). USD/JPY (^USDJPY +0.34%) is up +0.36 (+0.34%) on reduced safe-haven demand for the yen. June 10-year T-note prices (ZNM18 -0-050) are down -6.5 ticks as safe-haven demand faded with the partial recovery in E-minis.
May WTI crude oil (CLK18 +0.21%) this morning is up +0.33 (+0.52%) and May gasoline (RBK18+0.57%)is up +0.0187 (+0.95%) on an upward rebound after Monday's sharp losses. Precious metals prices this morning are giving back some of Monday's sharp gains with June gold down 4.7 (-0.35%) and May silver down -0.127 (-0.76%), but May copper is up +0.011 (+0.34%). Grain prices this morning are trading higher with May corn up +0.25 (+0.06%), May soybeans up +7.75 (+0.75%), and May wheat up +4.25 (+0.95%). Softs this morning are mixed with May sugar down -0.19 (-1.52%), May coffee up +0.10 (+0.09%), May cocoa down -34 (-1.29%), and May cotton up +0.18 (+0.22%).
The Trump administration is reportedly pushing for a preliminary NAFTA agreement that it can announce next week.
The Australian central bank today at its monthly policy meeting left its key interest rate unchanged at a record low of 1.5% for the 20th straight month, which was fully in line with market expectations.
Bank of Japan Governor Kuroda told parliament that the Bank of Japan is internally discussing about how to begin exiting from its stimulus program but that it is too early to talk about details in public.
U.S. Stock Preview
Key U.S. news today includes: (1) Mar total vehicle sales (expected 16.90 million, Feb 16.96 million), (2) Minneapolis Fed President Neel Kashkari (non-voter) speaks at a regional economic forum in Duluth, MN, (3) Fed Governor Lael Brainard (voter) speaks about financial stability in a lecture at the Stern School of Business at NY Univ.
Notable Russell 1000 earnings reports today include: none.
U.S. IPO's scheduled to price today: Spotify (SPOT) in alternative IPO.
Equity conferences this week: Cowen & Co. Future of the Consumer Conference on Tue.
June S&P 500 E-minis this morning are moderately higher by +0.50%. Monday's closes: S&P 500 -2.23%, Dow Jones -1.90%, Nasdaq -2.89%. The S&P 500 on Monday closed sharply lower on China's announcement that already-announced tariffs on $3 billion of U.S. imports would go into effect on Monday. Stocks were also undercut by the weaker-than-expected March U.S. ISM manufacturing index report of -1.5 to 59.3 vs expectations of -1.2 to 59.6. There was also continued weakness in tech stocks on trade tensions. Amazon.com fell sharply as President Trump continued his tweet attack on the retailer.
June 10-year T-notes are down -6.5 ticks on reduced safe-haven demand. Monday's closes: TYM8 +4, FVM8 +3.50. Jun 10-year T-notes on Monday closed higher on safe-haven demand sparked by the sharp sell-off in stocks. T-notes also received support from the weaker-than-expected ISM manufacturing index of -1.5 to 59.3 and the recent easing of expectations for Fed rate hikes through 2019. The -3% plunge in May crude oil softened the inflation outlook.
The dollar index this morning is trading slightly lower by -0.06 (-0.06%) and EURUSD is slightly lower by -0.0011 (-0.09%). USD/JPY is up +0.36 (+0.34%) on reduced safe-haven demand for the yen. Monday's closes: Dollar Index +0.078 (+0.09%), EUR/USD -0.0022 (-0.18%), USD/JPY -0.39 (-0.37%). The dollar index on Monday closed slightly higher on trade tensions that sparked a big sell-off in U.S. stocks and possibly some capital flight from the U.S. The dollar was also undercut by the weaker-than-expected U.S. ISM manufacturing index report of -1.5 to 59.3, which was negative for the U.S. economy. USD/JPY fell by -0.37% as the yen saw some flight-to-quality demand on the sharp decline in U.S. stocks.
Precious metals prices this morning are giving back some of Monday's sharp gains with June gold down 4.7 (-0.35%) and May silver down -0.127 (-0.76%), but May copper is up +0.011 (+0.34%). Monday's closes: Apr gold +19.30 (+1.46%), May silver +0.404 (+2.48%), May copper +2.45 (+0.81%). Metals on Monday settled sharply higher on the plunge in stocks that sparked some flight-to-quality demand for precious metals. Copper prices received some support from the positive Chinese official manufacturing PMI report although the Caixan PMI report was weak.
May WTI crude oil this morning is up +0.33 (+0.52%) and May gasoline is up +0.0187 (+0.95%) on an upward rebound after Monday's sharp losses. Monday's closes: May crude -1.93 (-2.97%), May gasoline -0.0545 (-2.70%). May crude oil and gasoline on Monday fell sharply on the plunge in in U.S. stocks, which was negative for the economic outlook and energy demand. In addition, trade tensions and a risk-off mentality caused capital flight from the commodity sector.
Overnight U.S. Stock Movers
Spotify Technology (@symbolPercentChange((SPOT)) today is scheduled to hold an alternative IPO where the shares simply start trading publicly without the traditional Wall Street bank managing an IPO process.
At Tesla (TSLA -5.13%), CEO Elon Musk said he is personally taking charge of the Model 3 production line on order to fix production delays and meet the company's aggressive production targets.
Baker Hughes (BHGE) was upgraded to overweight from neutral and the price target was raised to $39 from $35 at Piper.
Switch (SWCH -0.38%) fell sharply by -10% in after-hours trading after its 2018 Ebitda forecast missed the consensus.
Viacom (VIAB -1.64%) fell sharply in after-hours trading on a report that CBS is preparing a below-market initial bid.
Wyndham (WYN -2.92%) received a rating of Outperform in new coverage by Oppenheimer with a price target of $135.